In 2023, Standard Chartered provided a USD 25 million trade finance facility to a prominent Asian steel company to support scrap steel uptake in its electric arc furnace (EAF) production facilities.
The steel producer has a net-zero target for 2050, interim decarbonisation targets for 2030, a published transition plan, and has been disclosing emissions since 2003. In line with its transition strategy, it is continuing to increase the utilisation of scrap to produce steel using EAFs rather than traditional carbon-intensive blast furnaces, significantly cutting its energy consumption and reducing its CO2 emissions by an estimated 75%. The company intends to increase its use of renewable energy and improve its EAFs’ efficiency to continue progressing towards its 2030 target and has identified steps for further decarbonisation beyond 2030.
Recycling steel by refining scrap in EAFs is already cost-competitive with more traditional forms of steel production and could reduce the industry’s 2050 emissions by up to one-fifth under some scenarios. It can play a significant role in the near-term decarbonisation of the steel sector until technologies that can address the high emissions associated with primary steel production become economic and scalable.
This transaction demonstrates how trade finance can support ongoing progress in the steel sector.
Read more on Standard Chartered’s net-zero targets here.
This case study was originally published in the Net-Zero Banking Alliance 2024 Progress Report (October 2024).
Disclaimer: NZBA shares case studies to promote member banks’ awareness of new approaches, tools, products, services, and transactions related to financing the transition to net zero. Featuring a case study naming a particular bank does not represent an endorsement of all actions from that bank.